Problem Solver: Scam drains Lowe's customer's gift card

After agreement by phone to sell it, scammer depletes balance of $3,228.10

December 13, 2012|Jon Yates' "What's Your Problem?"

After Jesse Houk lost his job, he tried to sell a Lowe’s gift card he had purchased. A call from a Nevada area code led to the $3,228.10 balance being depleted before the sale was made. (E. Jason Wambsgans, Chicago Tribune)

When he purchased the Lowe's gift card in March 2011, Jesse Houk thought it was an incredible deal.

The home improvement chain had a special in which it would add 10 percent to any card purchased — roughly the equivalent of sales tax.

It seemed like great timing. The Bloomington resident had been meaning to finish his basement and repair his back porch. He bought a $3,500 gift card, and Lowe's added $350 to his account.

Houk made some small purchases on the card, lowering the balance to $3,228.10, but he never got around to the repairs. Not long afterward, he was laid off.

"After I was let go, we went into survival mode," Houk said.

He asked Lowe's if he could return the card for a refund and give back the $350 bonus. The home improvement store said no.

So, needing money for his mortgage, food and utilities, he decided to sell the card on Craigslist. He listed the card, with its $3,228.10 balance, for $3,000 in June.

A short time later, a man called from a Nevada area code. The potential buyer identified himself as a traveling contractor and said he wanted to buy the card, but he needed proof it was worth $3,228.10.

"We were texting earlier that morning," Houk said. "I suggested, 'Once we're at the store, I can show you how much is on the card.' He said he was at work. He said, 'Let's just do it over the phone.'"

So Houk conducted a three-way call with the man and Lowe's automated system. He punched in his card number, and the system verified he had $3,228.10 left on the card.

"He was satisfied, and I was happy to finally get my money back from that card," Houk said.

They set up a meeting for the next day.

"When he didn't show up, my wife and I knew something was wrong," Houk said. "We went to Lowe's fearing we had been scammed."

Houk said he asked to speak to a manager at the Bloomington store, and a woman came out to speak to him. He told her his situation, and she assured him he could not be scammed.

"She said (the Craigslist buyer) would need the physical card to make a purchase, and since he didn't have it, there was nothing to worry about," Houk said. "We suggested that we buy products for the full $3,228.10 right then and there, but she said we didn't have to do that because this scammer couldn't do anything unless he had the card."

He remained skeptical but figured the Lowe's employee knew what she was talking about.

When he returned to the store about a month later to use the card, he learned the card had been drained.

The $3,228.10 had been spent in two online purchases, a small one in late June and larger one in early July, Houk said he was told.

He was, to put it mildly, livid. He filed a police report, and investigators were able to track the purchase to a router in Washington, D.C., Houk said. But police could not trace the purchases to the user, he said.

Houk texted the potential "buyer" several times but received no response. When he tried calling, he got a recorded message saying the number had been disconnected, he said.

He then spoke to the manager of the Bloomington Lowe's, who said there was nothing the store could do. He called Lowe's customer service and was told he should have known better, Houk said.

In the months that followed, he called Lowe's again and again, arguing that he was given bad information at the Bloomington store.

Finally, Lowe's director of investigations contacted Houk to say the company was not responsible for his loss and would not reimburse him.

Upset, Houk emailed What's Your Problem?

"I fell for a scam, and that's my responsibility," he said. "But when I reported it to them, when I asked them what I should do, they gave me the wrong information."

He said Lowe's should be held accountable for telling him a scam artist could not access his account without having the card in hand.

"Since I trusted what they told me, I'm out $3,200," he said.

The Problem Solver contacted Lowe's spokeswoman Karen Cobb, who looked into the matter.

In an email, Cobb said that with the rise in popularity of gift cards, there has also been a rise in scams.

"We're not responsible for what customers decide to do with Lowe's gift cards after purchasing them, but we encourage customers to protect them just as they would any form of personal property or legal tender," she said. "We also don't recommend engaging with third-parties to dispose of gift cards."

The Problem Solver emailed Cobb twice to ask if a Lowe's employee told Houk his card could not be used unless the card was physically present. Cobb did not respond to those questions.

Houk said he's not pleased with Lowe's response.

"They know they're responsible because someone at Lowe's gave me that bad information," he said. "I'm just kind of counting the money as being lost."